European shares, though, were set for a lower start, with
financial spreadbetter London Capital Group expecting Britain's
FTSE 100 to open -34 points, or -0.5 percent; Germany's
DAX to open -47 points, or -0.5 percent; and France's
CAC 40 to open -38 points, or -0.8 percent.

Asian shares took an early knock after the China HSBC flash
manufacturing purchasing managers index (PMI) fell to an
eight-month low in March, the latest in a string of indicators
pointing to a loss of momentum in China's economy.

But MSCI's broadest index of Asia-Pacific shares outside
Japan still managed to add 0.9 percent and
Japan's Nikkei share average gained 1.8 percent, after
solid performances on Wall Street last week, with the Dow
and S&P 500 posting weekly gains of 1.5 percent and 1.4
percent.

European shares also recorded their biggest weekly gain in a
month last week.

"Shares are up in Asia on follow-through support from last
week, with the markets choosing to focus on the positive factors
for now," said Mitul Kotecha, Credit Agricole's Hong Kong-based
head of global markets research for Asia.

But Kotecha added that whether this positive tone persists
will depend on developments this week in the geopolitical arena.

The preliminary HSBC China PMI reading of 48.1 fell from
February's final reading of 48.5, while the "flash" March index
also showed new orders slid for a fourth consecutive month to
46.9 -- the lowest point since July 2013, while output fell to
47.3, the lowest since September 2012.

Expectations that Beijing will have to unveil stimulus
measures buoyed shares in Hong Kong and China. The Hang Seng
index gained 1.7 percent and the Shanghai Composite Index
was up 1.2 percent.

"Usually, for the month of March, the PMI will rebound,
because after Chinese New Year there should be some activity
coming back, but this PMI is disappointing," said Wei Yao, China
economist at Societe Generale in Hong Kong. "The government will
probably have to provide some supporting measures."

Overall, appetite for risk remained somewhat suppressed as
geopolitical tensions continued to simmer after NATO's top
military commander said on Sunday that Russia had built up a
"very sizeable" force on its border with Ukraine, and Moscow may
have a region in another ex-Soviet republic, Moldova, in its
sights after annexing Crimea.

The euro edged away from a recent low hit against the
dollar as traders continued to recalibrate expectations around
U.S. monetary policy after Fed Chair Janet Yellen last week
raised the prospect of an earlier start to interest rate hikes.

It was $1.3805 after hitting a two-week low of
$1.3749 on Thursday.

Investors snapped up the greenback last week as they swiftly
brought forward the risk of a U.S. interest rate hike early in
2015 after Yellen surprised markets by raising the prospect of
such a move.

The dollar rose 0.2 percent to 102.44 yen, with the
Japanese currency drawing underlying support from safe-haven
bids as investors continued to brood over the crisis in Ukraine.

Currency markets were also keeping an eye on emergency talks
between leaders of the Group of Seven leading nations scheduled
to take place later in the session at The Hague, where the G7
will probably discuss how to put further pressure on Russia and
at what potential cost.

Three-month copper on the London Metal Exchange fell
0.5 percent to $6,447.00 a tonne in the wake of the China data,
erasing small gains from the previous session.

Spot gold dipped to $1,327.26 an ounce, still dazed
from a sharp fall triggered by Yellen's comments last Wednesday.
Russia's assurance last week that it had no plans to invade
other parts of Ukraine has also taken some of the shine off
gold.

Crude oil held some distance above last week's low as fresh
U.S. and European sanctions on Russia renewed fears of a supply
disruption from the world's second largest oil producer.

Brent crude traded at $106.71 a barrel with supply
disruption worries keeping it off a six-week trough of $105.41
hit on Thursday.
(Additional reporting by Wang Lan and Adam Rose in Beijing;
Editing by Shri Navaratnam and Eric Meijer)